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Buccaneer Scraps Plans for Tyonek Drilling

Company VP Tells City Council 'Endeavour' Rig Will Stay In Homer Through October

Aaron Selbig

Wednesday, October 10, 2012

The jack-up rig Endeavour arrived in Kachemak Bay Aug. 24th

It’s been more than six weeks since Buccaneer Energy’s jack-up rig Endeavour arrived in Alaska to begin drilling for oil and gas in Cook Inlet. But the rig remains tied up at the Homer harbor and plans for it to drill this year near Tyonek have now been scrapped.

It was August 24th when the 400-foot-tall jack-up rig Endeavour – one of the largest such rigs in the world – arrived in Kachemak Bay from Singapore. The plan at the time was for the rig to stay a week or two before heading north to drill near Tyonek.

A series of problems has plagued Buccaneer’s rig since then, however, and it remains at Homer’s Deepwater Dock, with its legs extended down 18 feet into the mud.

In an October 5th letter to Buccaneer obtained by KBBI, officials from the Alaska Department of Fish and Game said they did not plan to take enforcement action against the company for lowering the Endeavour’s legs within the Kachemak Bay Critical Habitat Area.

Buccaneer says it was forced to take that action during windstorms that occurred September 15th and 16th, after the rig damaged the dock and began straining the power of the two tugboats that held it in place.

In the letter, Kenai Peninsula Area Manager Ginny Litchfield pointed out that it is normally a violation of the Critical Habitat Area management plan to allow drilling rigs in Kachemak Bay and Buccaneer’s original permit allowing it do so says the Endeavour will “at no time make contact with the substrate.”

Still, Litchfield said Fish and Game officials agreed that putting the legs down was the safest thing to do, considering the circumstances. The letter says the state could reconsider its position if the Endeavour is not moved out of the area by October 31st.

In a presentation to the Homer City Council Monday night, Buccaneer Vice President Mark Landt said the company expects the Endeavour to work in Cook Inlet for years to come.

"We did not, however, expect for it to be at the dock in Kachemak Bay for this long," said Landt. "We ran into a few unforeseen issues and ... it is critical that we solve each before departing."

Among the issues with the rig was the factory recall of a fast rescue vessel that was stored on the rig. That has since been replaced, said Landt. Also, the rig’s general alarm system and part of its fire suppression system both failed tests and had to be replaced – both of those items are Coast Guard safety requirements.

Landt says the latest plan is for the Endeavour to move out of the harbor by the end of October and spend the winter drilling in the Cosmopolitan Unit near Anchor Point in southern Cook Inlet.

Following his presentation, Landt held an impromptu press conference outside council chambers, where members of the public and the Homer media gathered to ask questions. In response to a question from Homer News reporter Michael Armstrong, Landt admitted that Buccaneer has not yet secured the necessary permits from the state to drill in the Cosmopolitan Unit, nor does it yet have permits from the Army Corps of Engineers to put Endeavour’s legs down there.

Still, he said the goal is to have the rig in place at Cosmo by October 31st.

"We're working as fast as we can to complete all the work so we can get the necessary authorizations so that we can leave Homer," he said.

Asked about the company’s plan to drill a relief well if it encounters a serious problem in the inlet, Landt said company would use the “first available equipment” to do so. He said that likely would be the Furie-owned Spartan 151 jack-up rig that has already been working in the inlet – but Buccaneer does not yet have an agreement in place with Furie for that possibility.

Landt promised Buccaneer would make its blowout contingency plan available to members of the city council. He also touted the fact that Buccaneer has so far hired 47 Alaskans to work on its projects, in addition to many Homer-area laborers who have been working on the Endeavour.

Landt spent most of his time at Monday’s meeting outlining Buccaneer’s plans for on-shore gas drilling in the West Eagle area out East End Road. He promised the company would soon hold public meetings in Homer on the project but did not give a firm date.

Homer Mayor Jim Hornaday suggested that Buccaneer open an office in Homer and conduct a job fair in the area in the near future.

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